Kelly William Cobb

Net Neutrality has long been deemed a solution in search of a problem; an unnecessary policy move designed solely to grab regulatory hold of the Internet. Nevertheless, yesterday a partisan 3-2 vote by the Federal Communications Commission established these Internet regulations in law.

With the vote came attacks from left-wing groups who have long pushed for an Internet takeover. Most notably, the group Free Press claimed the "fake" Net Neutrality rules do not go far enough. ATR has highlighted the (dare I say) neo-Marxists at Free Press many times before (see 1, 2, 3, 4, 5, 6, 7). However, a story by John Fund in yesterday's Wall Street Journal paints a clear picture of who they are, who funds them, their connections with the current FCC, and how they marketed and manufactured unwarranted Internet regulations into law. Most importantly, it sheds light on why they think these rules are too weak by showing what it is they ultimately want. Excerpts from the story are below, but the entire piece is certainly worth a read here.

"The net neutrality vision for government regulation of the Internet began with the work of Robert McChesney, a University of Illinois communications professor who founded the liberal lobby Free Press in 2002. Mr. McChesney's agenda? "At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies," he told the website SocialistProject in 2009. "But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control."

... In 2009, Free Press commissioned a poll, released by the Harmony Institute, on net neutrality. Harmony reported that "more than 50% of the public argued that, as a private resource, the Internet should not be regulated by the federal government." The poll went on to say that since "currently the public likes the way the Internet works . . . messaging should target supporters by asking them to act vigilantly" to prevent a "centrally controlled Internet."

To that end, Free Press and other groups helped manufacture "research" on net neutrality. In 2009, for example, the FCC commissioned Harvard University's Berkman Center for Internet and Society to conduct an "independent review of existing information" for the agency in order to "lay the foundation for enlightened, data-driven decision making."

Considering how openly activist the Berkman Center has been on these issues, it was an odd decision for the FCC to delegate its broadband research to this outfit. Unless, of course, the FCC already knew the answer it wanted to get.

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Today, the Federal Communications Commission (FCC) voted 3-2 along party lines to establish Net Neutrality Internet regulations. The rules will determine how Internet service providers can manage data on their networks. Kelly William Cobb, executive director of Americans for Tax Reform's Digital Liberty Project, issued the following statement:

“Today, the FCC shackled a hitherto innovative and dynamic Internet with unwarranted and burdensome regulations. The rules, crafted in a non-transparent and partisan process, lack proof of any market failure and ignore opposition from Congress, the courts, and the American public.

“The FCC’s last-ditch Net Neutrality rules will face an incoming Congress even more dead-set against Internet regulation than the current one. The new Congress should use every opportunity to take these regulations head on. Additionally, three of the five Commissioners have expressly acknowledged that this decision stands on dubious legal ground and is highly unlikely to survive a court challenge, much like its predecessor earlier this year.

“Net Neutrality proponents view it as a means to an end, and they will use this foot in the door to forever push for greater regulation of the Internet. By leaving the Title II reclassification docket open, the FCC continues to create enormous uncertainty and invites calls for more unnecessary, Depression-era regulations.

“The Commission knows full well that the future of communications largely lies with the Internet. Despite highly tenuous legal standing and enormous opposition, this vote is a clear attempt by the FCC to gain regulatory control over the hitherto free-market bastion that has revolutionized how we interact and communicate today.”

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Next Tuesday, the Federal Communications Commission is poised to establish Net Neutrality Internet regulations on a 3-2 partisan vote. And since Chairman Julius Genachowski has refused to release a copy of the proposed rule until the day of, no one aside from the five voting commissioners knows exactly what it contains or how bad it will be.

One thing we do know is that Genachowski plans to include a requirement that Internet service providers (ISPs) are transparent about their network management policies – how ISPs organize data traffic to increase efficiency and reduce network congestion. Yet, despite consistent and hollow rhetoric to the contrary, Genachowski has failed to be transparent about his own Internet regulatory policy.

Genachowski has claimed that giving the public greater access to information “is government the way it should be – open and transparent.” Last year, when he began pushing for Net Neutrality Internet regulations, Genachowski stated flatly: “I will ensure that the rulemaking process will be fair, transparent, fact-based, and data-driven.” Unfortunately, this last-ditch proposal is the opposite: partisan, non-transparent, and lacking proof of any market failure that would warrant government regulation.

On top of this, late last Friday – a mere 11 days before the FCC votes – the FCC’s Wireline Competition Bureau dropped roughly 1,900 pages of documents supporting their unreleased Internet regulation proposal into the docket. Batched together in a series of ten non-searchable, unorganized PDFs are thousands of scanned excerpts from studies, websites, books, journals, and more. While this serves as a last minute distraction for stakeholders trying to better surmise what regulations the FCC will be enacting, it's hardly enough time to digest all the documents. Further, the data dump came just before the FCC's "sunshine period" started, which virtually prevents the public from following up with commissioners about the documents until after the proposal is voted on.

This action by the FCC is perhaps the first signal of how President Obama plans to hand victories to his far left base: regulations crafted by unaccountable and non-transparent government agencies behind closed doors. We'll find out just how bad these regulations are when the Commission begins voting on them next week.

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Today, the Federal Communications Commission (FCC) announced it will make a last-ditch effort to enact Net Neutrality Internet regulations before the new year. While specifics of the proposal have not been released, the FCC has announced that it intends to regulate how Internet service providers manage data that flow on their networks.

Kelly William Cobb, executive director of Americans for Tax Reform's Digital Liberty Project, made the following statement:

“It is highly disappointing that after overwhelming bipartisan opposition from Congress, the American public, and the Courts, the FCC is continuing its pursuit to regulate the Internet. The proposal – released by a supposedly pro-transparency agency, but under the cover of darkness – continues to be a solution in search of a problem.

While the FCC's recent Net Neutrality push remains unwarranted, we are at least pleased that the Commission has abandoned its more onerous proposal to regulate the Internet under antiquated Title II laws.

Chairman Genachowski indicated today that he does not intend to circumvent Congress. We agree with this approach and continue to believe that any action regarding Internet regulation should originate in Congress, if at all.”

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Last week, every single signer of a Net Neutrality Pledge to regulate the Internet lost their election. Then, two days later on November 4, the FCC released their November meeting agenda and Net Neutrality was notably absent. So, where does the FCC’s (and the neo-Marxist left’s) pet project go from here?

Most agree that the FCC’s Title II Internet regulation scheme is dead. For almost a year, the Commission has threatened to reclassify broadband Internet under 1930s laws to enact Net Neutrality regulations, and then some. Yet, over 300 Members of Congress – a vast, bipartisan majority from both the House and Senate – have stated clear opposition to the approach. Further, the Republicans taking control of the House of Representatives in January are virtually unanimously opposed to Net Neutrality rules. If the FCC made a move to enact regulations by fiat, Title II would likely wind up in court for the next few years. In the meantime the House, which controls Congress’s purse strings, could vote to defund any FCC enforcement, as Rep. John Culberson (R-Texas) and Sen. Kay Bailey Hutchison (R-Texas) have already threatened to do.

At the same time, Congress is unlikely to take up the issue in the lame duck session or beginning next year. Rep. Henry Waxman’s (D-Calif.) attempt to negotiate even a watered-down version of Net Neutrality went down in flames, causing him to oddly blame Republicans (whose votes, being in the minority, were unneeded) and back the FCC’s effort instead (which was probably his intent all along). Beginning next year, every Republican in line to chair the House Energy and Commerce Committee, where Net Neutrality legislation must originate, is staunchly opposed, and focused on far more important bipartisan tech and telecom issues. This includes releasing more spectrum for mobile broadband Internet, something the FCC will finally begin focusing on at their meeting this month.

Last Thursday, when the Commission released their Net Neutrality-less agenda, was also the last day to submit comments on the current FCC proceeding. ATR’s Digital Liberty Project filed comments focused on how regulation of specialized broadband services means less investment, innovation, and consumer benefits in the future. We also pointed out the many technical challenges to enacting Net Neutrality on mobile Internet and argued that it – along with wired Internet – should remain completely untouched by the FCC. We only hope they take this advice at their final meeting of the year in December by again leaving Internet regulation off the agenda.

Well, the results are in and every single candidate who signed the Net Neutrality Pledge lost their race. I had a piece in today's Daily Caller explaining why. From the op-ed:

Every single signer of the Net Neutrality Pledge lost their election on Tuesday night. They included big name Senate hopefuls Alexi Giannoulias (D-Ill.), Rep. Joe Sestak (D-Penn.), and Rep. Paul Hodes (D-N.H.). In fact, going into the election only one signer (Ann Kuster in New Hampshire's 2nd District) was leading in the polls, and she lost by 2 percentage points.

Most of these races were decided well before the pledge was released. However, it’s clear that those who demand Internet regulations are so radically progressive that Americans overwhelmingly view them as unacceptable candidates. Net neutrality zealots simply do not share the same view as the 75 percent of Americans who believe Internet is “working well” and the 55 percent of Americans opposed to regulating it, according to a recent poll. A vast, bipartisan majority of over 300 members of Congress have realized this and stated opposition to the FCC’s “Title II” plot to regulate the Internet.

Net neutrality is not just a political loser; it’s a horrendous policy. The candidates’ Net Neutrality Pledge used flowery and meaningless language to propose severely onerous regulations. They promised “to protect net neutrality for the entire Internet — wired and wireless,” to ensure there is “free speech online,” and to stand against “any attempt by big corporations to control the Internet.” Yet none of the regulations resulting from this hollow rhetoric would benefit American consumers.

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Advocates of government intrusion into parental decisions, like Hillary Rodham Clinton, say that “it takes a village” to raise a child; that without government regulations, families cannot adequately bring up children. This is the premise of a California law being reviewed by the U.S. Supreme Court today, which would ban the sale of “violent video games” to minors. Laws such as these no doubt have good intentions, but they raise serious First Amendment and practical concerns, in addition to costing taxpayers large sums of money.

The case of Schwarzenegger v. EMA centers on whether government can exempt some video games from First Amendment protections. While a ban on the sale of content (books, movies, video games, etc.) to adults is unconstitutional, California and others have argued that video games have an affect on minors that gives government the ability under current legal precedent to restrict sales. Yet, to date, every court that has taken up the issue (at least eight state courts and a multitude of localities) has rejected these arguments, shooting down the law on First Amendment grounds.

From a taxpayer advocate’s perspective, the video game laws have become incredibly costly. Each time a case is brought to court, taxpayers are forced to foot the bill for state Attorney Generals to defend the law – to the tune of over $2 million to date. Meanwhile, California has been defending this case while struggling to solve a $19 billion overspending problem, which is poised to reemerge after the budget passed with gimmicks and federal funds. Former Utah Governor Jon Huntsman rightly vetoed a law similar to that of California’s last year due to the expected cost.

From a limited government perspective, the law assumes that governments – not parents – are best suited to raise children. Such laws effectively nullify customizable parental controls, handing politicians and bureaucrats the authority to insulate children from inappropriate content as they see fit. Yet, the free-market has already brought about parental controls on gaming consoles and the Entertainment Software Ratings Board (ESRB), which places ratings and content descriptions on video games. These allow parents to better choose what games are most appropriate for their kids without a one-size-fits-all government regulation. For example, ESRB has seven age ratings and thirty content descriptors, eight that describe a specific type of violence. Yet, under California’s law, government regulators would place only one age descriptor (“18”) on a game’s case, and which of the eight descriptions of violence would they choose?

There also are numerous practical and legal problems with implementing video game bans. As argued in our joint amicus brief with the Center for Democracy and Technology and others, the case has profound implications for online gaming, which is quickly replacing physical game purchases at brick-and-mortar stores. The California law specifically targets physical video games, which means it is either ineffective for online gaming or would be expanded in the future to apply to online games. Yet, online age verification systems are highly difficult to implement and easy to subvert. Further, it would require all gamers (including adults) to verify age, another First Amendment constitutional violation.

The Supreme Court’s review could be the final decision that ends the onslaught of laws and lawsuits on the state and local level. Whether it is a clear win for parents and limited government advocates or for government bureaucrats remains to be seen.

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There has been quite a lot of talk from pro-Internet regulation groups about why Net Neutrality is so important, but it’s been suspiciously absent from the left’s campaign talking points – until now. Today, a group of 95 Democrat candidates signed a vague and inaccurately worded pledge promising to regulate the Internet. Organized by the Progressive Change Campaign Committee, the pledge promises to enshrine Net Neutrality rules into law that would allow the Federal Communications Commission to regulate how data flows across the Internet. The left wants you to believe that a lot of Democrats support Net Neutrality, but with this announcement we also learned why Net Neutrality has been suspiciously absent from Democrats’ talking points.

We count one – that’s right, one – of the ninety-five signers of the pro-regulation Pledge who is actually leading in the polls heading into Tuesday’s election, according to Real Clear Politics and Cook Political Report. The issue of Net Neutrality is so far left that no one wants to campaign on it and those who are pushing it aren’t even viewed as acceptable candidates. This makes sense, since the most recent poll found that 75 percent of Americans think the Internet is “working well” and 55 percent were opposed to regulating it. Perhaps this is why over 300 Members of Congress - a vast bipartisan majority - have opposed the FCC's Title II Internet regulations.

A couple more comments about the Internet regulation pledge. First, it claims that Net Neutrality is the “First Amendment of the Internet,” which is odd since there is great concern that the regulations under consideration could lead to the government regulating online speech. Worse, far left groups pushing Net Neutrality Internet regulations, such as Free Press, have already called for the FCC to monitor speech online. And when these groups aren’t busy running the First Amendment through the mud, they’re creating a new “right” to Internet access.

Second, the Internet regulation pledge demonizes businesses for trying to “control the Internet,” handing that responsibility to government instead. What this empty rhetoric won’t tell you is that proponents of Internet regulations want to ban certain practices that reduce congestion and increase speeds for consumers. Given the nature of networks, Internet service providers must organize data traffic at a rapid pace to prevent congestion and increase efficiency; thereby ensuring customers have better service.

Americans for Tax Reform runs the Taxpayer Protection Pledge. We fight higher taxes because the only way government can materialize enough power to control your life and the economy is by pillaging taxpayers’ wallets. Yet, government doesn’t only wreak havoc by taking money out of the private economy through excessive taxation; it does so with excessive regulations that crush investment and innovation, just like those proposed by the progressive signers of the Net Neutrality pledge. It should thus come as no surprise that not a single signer of the Internet regulation pledge has also signed the Taxpayer Protection Pledge.

ATR looks forward to letting Americans know the multitude of Taxpayer Protection Pledge signers who win their election on Tuesday night. We also look forward to letting Americans know the multitude of pro-Net Neutrality Pledge signers who lose.

Beginning last year, the North Carolina Department of Revenue (DOR) sent letters to online retailer Amazon.com demanding that the company provide “all information” about in-state customers and their nearly 50 million purchases. This included names, addresses, products purchased with descriptions, and more. The state DOR would then target those residents and force them to pay “use tax” on the purchased goods. Yet, a federal court in Seattle has now ruled such “reporting requirements” unconstitutional.

Online retailers do not collect tax on Internet and other out-of-state purchases unless they have a physical nexus in the state. Doing so would be a violation of the Commerce Clause, per U.S Supreme Court precedent in the 1992 case Quill v. North Dakota. This has led a few states, such as Colorado and North Carolina, to demand detailed consumer information to force them to pay the “use tax” required on out-of-state purchases.

Yet, as we have repeatedly argued and a federal court has confirmed, such demands for information move from being a Commerce Clause violation to trampling on First Amendment and privacy rights. Similarly, Colorado has enacted a similar “reporting requirements” scheme, despite a 2002 state Supreme Court ruling that consumers have a “fundamental right to purchase books anonymously, free from governmental interference” under the First Amendment.

The District Court Judge, Marsha Pechman, agreed, noting simply that “the DOR’s request runs afoul of the First Amendment.” The case against North Carolina was brought by Amazon.com and the ACLU.

While this is welcome news for North Carolina shoppers, the fate of the Internet tax collection scheme is still uncertain in Colorado, where a similar injunction has been filed. It has also not stopped lawmakers in other states, such as California, from continuing their push to collect tax on online purchases from out-of-state companies.

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Rarely do we look for regulatory leadership from our government loving friends in Europe. But last week I had a piece in the Daily Caller noting that even European regulators are shying away from imposing burdensome Net Neutrality Internet regulations. From the piece:

...when it comes to regulations on broadband Internet, our Federal Communications Commission is out-Europeing Europe. In late September, the Body of European Regulators for Electronic Communications (BEREC), representing regulators from each member country, formally advised the European Commission not to establish net neutrality regulations. Such rules would dictate how Internet networks are managed. Yet, when it came to the need to establish onerous rules on broadband service providers, the European regulators had this to say:

“BEREC believes that, at present, it would be premature to consider further intervention with respect to net neutrality on an EU level.”

So, what about claims from left-wing media reform groups in the United States, like Free Press and Public Knowledge, that without net neutrality regulations service providers will routinely block access and content, or slow Internet speeds?

“BEREC notes that incidents so far remain few and for the most part have been solved without the need for regulatory intervention.”

So, it appears that any instances were not deliberate or widespread, and consumer actions in a free market can solve whatever problems do exist. But what about claims that service providers will discriminate against consumers by prioritizing some Internet traffic above others? BEREC notes:

“Any electronic communication network needs certain functions to ensure that the network is capable of providing adequate transmission performance . . . These transmission management functions may contribute to improve the experience of all users, and are necessary to deliver high quality services of all types.”